ABC Water LLC v. APlus Water LLC ( 2019 )

1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 A BC W ater LLC, ) No. CV-18-04851-PHX-SPL ) 9 ) 10 Plaintiff, ) ORDER vs. ) ) 11 ) APlus Water LLC, ) 12 ) 13 Defendant. ) ) 14 ) 15 Plaintiff ABC Water LLC (the “Plaintiff”) filed suit against APlus Water LLC (the 16 “Defendant”) alleging multiple causes of action for trademark infringement and unfair 17 competition, among other claims. (Doc. 1) The Defendant moves to dismiss the 18 Plaintiff’s claims against it (the “Motion”). (Doc. 12) The Motion was fully briefed on 19 February 21, 2019. (Docs. 14, 15) Oral argument was not requested. The Court’s ruling 20 is as follows. 21 I. Background 22 The Plaintiff distributes water softeners, water filters, and related tools using the 23 “ABCwaters” trademark and service mark. (Doc. 1 at 2) The Defendant distributes water 24 softeners and is a competitor of the Plaintiff. (Doc. 1 at 4) The Plaintiff owns the 25 copyrights for approximately six images related to its products. (Doc. 1-4; Doc. 1 at 4) 26 Both the Plaintiff and the Defendant sell their products on Amazon.com. (Doc. 1 at 2, 5) 27 The Plaintiff alleges that the Defendant used the Plaintiff’s “ABCwaters” trademark and 28 1 several of the Plaintiff’s copyrighted images without permission. (Doc. 1 at 7) The 2 Plaintiff initiated this lawsuit alleging causes of action for trademark infringement, 3 among other claims (the “Complaint”). (Doc. 1) The Defendant filed the Motion seeking 4 dismissal of the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 5 12) 6 II. Legal Standard 7 To survive a motion to dismiss, a complaint must contain “a short and plain 8 statement of the claim showing that the pleader is entitled to relief” such that the 9 defendant is given “fair notice of what the . . . claim is and the grounds upon which it 10 rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (quoting Fed. R. Civ. P. 11 8(a)(2); Conley v. Gibson, 355 U.S. 41, 47 (1957)). The Court may dismiss a complaint 12 for failure to state a claim under Federal Rule 12(b)(6) for two reasons: (1) lack of a 13 cognizable legal theory, and (2) insufficient facts alleged under a cognizable legal theory. 14 Balistreri v. Pacificia Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 15 In deciding a motion to dismiss, the Court must “accept as true all well-pleaded 16 allegations of material fact, and construe them in the light most favorable to the non- 17 moving party.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010). In 18 comparison, “allegations that are merely conclusory, unwarranted deductions of fact, or 19 unreasonable inferences” are not entitled to the assumption of truth, and “are insufficient 20 to defeat a motion to dismiss for failure to state a claim.” Id.; In re Cutera Sec. Litig., 610 21 F.3d 1103, 1108 (9th Cir. 2010). A plaintiff need not prove the case on the pleadings to 22 survive a motion to dismiss. OSU Student All. v. Ray, 699 F.3d 1053, 1078 (9th Cir. 23 2012). 24 A court ordinarily may not consider evidence outside the pleadings in ruling on a 25 Rule 12(b)(6) motion to dismiss. Zemelka v. Trans Union LLC, 2019 WL 2327813, at 1 26 (D. Ariz. May 31, 2019) (citing United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 27 2003)). “A court may, however, consider materials—documents attached to the 28 complaint, documents incorporated by reference in the complaint, or matters of judicial 1 notice—without converting the motion to dismiss into a motion for summary judgment.” 2 Id. Additionally, “[e]ven if a document is not attached to a complaint, it may be 3 incorporated by reference into a complaint if the plaintiff refers extensively to the 4 document or the document forms the basis of the plaintiff’s claim.” Lovelace v. Equifax 5 Info. Servs. LLC, 2019 WL 2410800, at 1 (D. Ariz. June 7, 2019) (citing Ritchie, 342 6 F.3d at 908). A plaintiff need “not explicitly allege the contents of that document in the 7 complaint” for the court to consider it, as long as the “plaintiff’s claim depends on the 8 contents of [the] document, the defendant attaches the document to its motion to dismiss, 9 and the parties do not dispute the authenticity of the document.” Knievel v. ESPN, 393 10 F.3d 1068, 1076 (9th Cir. 2005). “[T]he district court may treat such a document as part 11 of the complaint, and thus may assume that its contents are true for purposes of a motion 12 to dismiss under Rule 12(b)(6).” Ritchie, 342 F.3d at 908. 13 III. Analysis 14 The Defendant seeks dismissal of the Complaint pursuant to FRCP 12(b)(6). 15 However, throughout the Motion, the Defendant fails to attack the sufficiency of the 16 allegations pleaded in the Complaint. Instead, the Defendant asks for the Court to find 17 that the allegations in the Complaint are not plausible based on an “Amazon Business 18 Solutions Agreement” (the “ABS Agreement”), which the Defendant argues controls the 19 dispute between the parties. (Doc. 12 at 2) In response, the Plaintiff argues that the 20 Motion is improper because it seeks dismissal pursuant to an affirmative defense, and the 21 Court should not properly consider the ABS Agreement in deciding the Motion. (Doc. 14 22 at 2) The Defendant attempts to redeem the Motion by focusing the arguments made in 23 its reply on the insufficiency of the allegations made in the Complaint. (Doc. 15) 24 First, the Court reiterates that a motion to dismiss pursuant to FRCP 12(b)(6) 25 focuses on whether or not a plaintiff has alleged sufficient facts to state a plausible claim 26 for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (stating “[t]o survive 27 dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), 28 a complaint must contain more than ‘labels and conclusions’ or a ‘formulaic recitation of 1 the elements of a cause of action’; it must contain factual allegations sufficient to ‘raise a 2 right to relief above the speculative level.’”). In this case, the Defendant asks the Court 3 to move beyond the sufficiency of the allegations in the Complaint and focus on contract 4 interpretation. Specifically, the Defendant requests for the Court to “interpret the terms 5 of the [ABS Agreement] as a matter of law,” and dismiss the Complaint solely based on 6 the Court’s interpretation of the ABS Agreement. (Doc. 12 at 4) The Court finds that 7 dismissal on the basis of contract interpretation is not properly addressed through a FRCP 8 12(b)(6) motion. Johnson v. KB Home, 720 F. Supp. 2d 1109, 1118 (D. Ariz. 2010) 9 (stating that the Court would decline to interpret a contract on a motion to dismiss); Seitz 10 v. Rheem Mfg. Co., 544 F. Supp. 2d 901, 910 (D. Ariz. 2008) (stating “it would be 11 premature at the motion to dismiss stage for the Court to delve into contractual 12 interpretation”). 13 The Court also finds that it is inappropriate to consider the terms of the ABS 14 Agreement in deciding the Motion because the ABS Agreement was not incorporated in 15 the Complaint. “When ruling on a Rule 12(b)(6) motion to dismiss, if a district court 16 considers evidence outside the pleadings, it must normally convert the 12(b)(6) motion 17 into a Rule 56 motion for summary judgment”. See Fed. R. Civ. P. 12(b); United States v. 18 Ritchie, 342 F.3d 903, 907–08 (9th Cir. 2003) (citing Parrino v. FHP, Inc., 146 F.3d 699, 19 706 n. 4 (9th Cir.1998)). “A court may, however, consider certain materials—documents 20 attached to the complaint, documents incorporated by reference in the complaint, or 21 matters of judicial notice—without converting the motion to dismiss into a motion for 22 summary judgment.” Id. The Plaintiff argues that the ABS Agreement was not attached 23 to the Complaint or referenced in the Complaint. (Doc. 14 at 3) The Court agrees that 24 there is no mention of the ABS Agreement in the Complaint, and the ABS Agreement is 25 not attached to the Complaint. 26 The Court also finds that the ABS Agreement is not properly considered via 27 judicial notice. Generally, a court may not consider evidence or documents beyond a 28 complaint in the context of a FRCP 12(b)(6) motion. As exceptions, (i) “a court may 1 | consider documents “whose contents are alleged in a complaint and whose authenticity no 2| party questions, but which are not physically attached to the [plaintiff's] pleading,’” and 3] (i) “a court may take judicial notice of ‘matters of public record outside the pleadings.’” 4| Ramirez v. Medtronic Inc., 961 F. Supp. 2d 977, 983 (D. Ariz. 2013). Here, the contents 5| of the ABS Agreement were not alleged in the Complaint, and the Plaintiff reserved its right to challenge the authenticity of the ABS Agreement. (Doc. 14 at 1) Therefore, the Court declines to consider the ABS Agreement to resolve the Motion. 8 Finally, the Defendant argues in its reply (Doc. 15) that the allegations in the Complaint are insufficient to state a claim under FRCP 12(b)(6). It is well settled that a party cannot rely on arguments made in a reply that are not made in the original motion. 11.| Surowiec v. Capital Title Agency, Inc., 790 F. Supp. 2d 997, 1002 (D. Ariz. 2011) (stating 12| “[iJt is well established in this circuit that courts will not consider new arguments raised 13 | for the first time in a reply brief”). 14 Accordingly, 15 IT IS ORDERED that Defendant APlus Water LLC’s Motion to Dismiss 16 | Complaint Pursuant to Fed. R. Civ. P. 12(b)(6) (Doc. 12) is denied. 17 18 Dated this 16th day of August, 2019. 19 20 21 RG 22 United States District kddge 23 24 25 26 27 28